EU Hedge Fund Reform and AIFMD

Passed in November 2010, the Alternative Investment Fund Managers Directive (AIFMD) establishes a consistent regulatory framework across the European Union for managers of alternative investment funds. Alternative investment funds include hedge funds, private equity, and a wide range of other types of institutional funds.

The AIFMD is intended to achieve the following public policy goals, among others:

Increasing the transparency of alternative investment fund managers towards investors, supervisors and employees of the companies in which they invest;

Equipping national supervisors, with the information and tools necessary to monitor and respond to risks that could be amplified by alternative investment activity;

Introducing a common and robust approach to investor protection, including rules regarding the use of depositaries by alternative investment funds; and

Increasing the accountability of managers holding controlling stakes in companies.